USD/JPY catches fresh bids, jumps to test 20-DMA

The USD/JPY pair finally broke its bearish consolidative mode to the upside and regained 113 handle amid some renewed buying interest seen around the US dollar against most of its major peers. However, negative treasury yields restrict any upside attempts in the major.

The spot is last seen exchanging hands around 113.09, having tested 20-DMA located at 113.17. The major ended its 3-day decline and now attempts a minor pullback, as the yen got hit somewhat by bigger-than expected Japanese trade deficit figures. The data released today showed a rise in the Japanese trade deficit to JPY 1,086.9 billion in January. 

Amid holiday-thinned markets, traders digest the Bank for International Settlement (BIS) published Real Effective Exchange Rate (REER) data published last Friday, which revealed that the Japanese Yen remained undervalued (below 100.00) in January. The REER stood at 76.06, at the lowest since February 2016.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 113.17/26 (20 & 5-DMA). A break above the last, the major could test 113.47 (10-DMA) and 114 (round figure) beyond the last. While to the downside, the immediate support is seen at 112.80 (daily low) next at 112.58 (Feb 17 low) and below that at 112.03 (Feb 2 low).